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Posts Tagged ‘tax preparation’

forgiven debt and taxes

Forgiven Debt and Taxes

October 07, 2021

Being in debt is not pleasant, but when a debt is forgiven, it can be a huge weight off your shoulders. Although it’s a great relief to no longer owe the debt, you may find that you now owe the IRS. The tax implications of debt forgiveness or cancellation, however, will depend on your individual facts and circumstances. Form 1099-C, Cancellation of Debt When a creditor ...

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rental income and taxes

Rental Income and Taxes

June 03, 2016

If you receive rental income, you are required to report it to the IRS. Any income received from the use or occupation of your property is considered rental income. There are two methods of accounting: the cash method and the accrual method. If you use the cash method, you report your gross rental income on your return for the year in which you receive it (not when it was earned). If you use the accrual ...

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fbar

What is FBAR and Do I Have to File One?

May 27, 2016  |   Last modified on July 9, 2021

You might be required to file the Report of Foreign Bank and Financial Accounts (FBAR) if you have funds in a foreign financial institution. Any U.S. person (explained below) having a bank account, brokerage account, mutual fund, trust, or any other kind of foreign financial account is required to file an FBAR, if the funds exceed a certain threshold. The FBAR can be filed electronically with the Department of Treasury every year. Do You Need to ...

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Household Employees

Household Employees and Employment Taxes

May 06, 2016  |   Last modified on May 14, 2021

Household workers can either be employees or self-employed. If they are considered employees, their employers must pay employment taxes. Examples of household employees include cooks, housekeepers, nannies, private nurses, and chauffeurs. If you have workers providing their services at your home, you need to determine if they are technically your employees and what taxes you are responsible for paying. Is Your Worker an Employee? For tax purposes, a household worker is an employee if you control what ...

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ein number

Do I Need an EIN?

April 29, 2016

Most businesses are required to have an Employer Identification Number (EIN). It is a nine-digit number that is used by the IRS to identify a business. The EIN is used by the business when filing its tax returns. When You Need an EIN Businesses need an EIN if any of these conditions are met: Your business has employees If you operate your business as a corporation or a partnership If you file any of these returns: employment, ...

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foreign banks

When to Report Income Held in Foreign Banks

April 08, 2016

If you are a U.S. citizen or a resident alien, you are required to report and pay taxes on all income within and outside of the U.S. Additionally, you must also report on your tax return any foreign bank accounts or foreign investment accounts, even if those accounts do not generate any taxable income. Foreign Bank and Financial Accounts (FBAR) If you have a foreign financial account, including a bank account, brokerage account, mutual fund, unit ...

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home office deduction

Qualifying For The Home Office Deduction

February 09, 2016

If you use a part of your home exclusively for business purposes, you might be eligible for the home office deduction. Available for homeowners and renters, this deduction is applied to all types of homes. Generally, you cannot deduct items related to your homes, such as mortgage interest, real estate taxes, utilities, maintenance, rent, depreciation, or property insurance, as business expenses. You may deduct expenses, however, that are exclusively for business purposes. The home office deduction is ...

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common tax deductions errors

Common Deduction And Credit Errors

January 15, 2016

Making errors in deductions and credits can ultimately result in having to pay back taxes. Additionally, after the filing deadline, any taxes owed will be compounded by penalties and interest. In order to avoid an IRS issue, taxpayers should avoid deduction and credit errors, such as: Claiming Charitable Contributions A large number of taxpayers deduct charitable contributions on their returns. Only contributions to charities that are eligible to be deducted should be considered. To avoid making a ...

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amended tax return

How and Why to Amend Your Return

December 28, 2015

You may file an amended return if you think you made a filing error or forgot to claim credits, deductions, or dependents. If you forgot to attach tax forms with your return, however, you may not amend your return. The IRS will ask you to send those. Generally, you can amend a return up to three years after filing it. How to Amend a Tax Return To amend Forms 1040, 1040A, or 1040EZ, you need to file ...

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death and taxes

Death and Taxes

September 18, 2015

After a person dies, their heirs are required to fulfill certain tax duties. This includes filing the deceased’s last tax return, managing their income, and paying any taxes due. The IRS usually approaches the children or family members of the deceased for resolution of any tax issues, including back taxes. It is important for the family/friends to resolve all the tax duties of the departed person as early as possible. Filing the Deceased’s Final Tax Return The ...

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